A friend of mine is busy preparing for the April 15 tax deadline and this reminded me of our conversation last week. While having lunch or was that an afternoon snack, we were discussing how much tax the government takes from our income and how much the tax exemption rates should be. For the record, a person receiving 10k/mo pays around 11% in income tax. Even if you do get a sizable raise, every 6,000-7,000 increase in salary, the government also raises your taxes by 1% so much so that by the time you even reach 100k/mo your average take home pay is only about 70k. 30,000 x 12 = 360,000–this is how much the government takes out of a high income earner, enough to pay roughly two government employees!
With the proliferation of call centers, many young professionals are paid an average of 18-25k/mo that translates to about 15-20k. Note that this does not include SSS/GSIS, HDMF, and other insurance fees. However this does not reflect the whole Philippine scenario. In 2004, the per capita income was pegged at USD 1007 versus Luxembourg’s 80k. On the brighter side, it is said to increase to 1,600 in about three years–we’ll see if this really happens.
Let’s try another scenario. Call center employee = Php 25k / USD 500. Average employee in US or Canada = USD 8-12/hr or approximately USD 1,600-2,400/mo. My friends in Canada contest that this is inaccurate. Albeit the income is higher, the cost of living is also higher so it somehow evens out in the long run.
Another cause for concern is that the fine dining experience has become and even more expensive, with 10% service charge and 12% VAT, that’s 22% on top of your bill. What if I didn’t like the service, do I still pay the 10%?
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